Nikkei rises as exporters gain, Japan Tobacco up

Tokyo, Dec 11: The Nikkei average rose 0.6 percent on Monday as Honda Motor Co. Ltd., Kyocera Corp and others advanced after the yen eased against the dollar, easing concern about exporters overseas earnings.

Shares of Japan Tobacco Inc. gained for the third straight session, advancing on continued speculation the tobacco giant may make a bid for British tobacco firm Gallaher Plc.

''High-tech stocks are seeing benefits from the weaker yen, and that is helping to lift the index,'' said Toshihiko Matsuno, assistant general manager of investment research at SMBC Friend Securities.

But with investors looking ahead to a meeting of the Federal Reserve later in the week, trade was likely to be conservative, Matsuno said.

''Until the Fed, the market is likely to move just on currency levels,'' he said.

The Nikkei was up 98.23 points at 16,516.05 as of 0058 GMT. The broader TOPIX index was up 0.6 percent at 1,625.71.

The yen was trading at 116.40 yen to the dollar, well off its four-month high of 114.43 yen touched last week. A weaker yen is a boon to companies that make the bulk of their sales abroad because it boosts profits when earnings from abroad are brought home.

Honda gained 1.7 percent to 4,140 yen. The auto maker relies on foreign markets for more than 80 percent of its sales.

Likewise, electronic components maker Kyocera rose 1.2 percent to 10,620 yen.

Japan Tobacco climbed 2.9 percent to 566,000 yen, extending gains made over the past two sessions. The company has risen 12.5 percent in the last three sessions on speculation it may bid for Gallaher, the manufacturer of ''Silk Cut'' brand cigarettes.

REUTERS